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anes121508

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Any of you guys and gals have a hospital employed position where compensation is determined and adjusted every so often by “fair market value”?

What’s your take on this? Any caveats?

Seems like it’s legally required, but I’m sure there are important details to know/understand
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I don’t think its legally required but I think your trying to say its required by legal, meaning the hospital lawyers have to assure that you are not being paid above fair market value. I’ve been told by adminastration that they have a policy against paying anyone above the 75 percentile.

I also know an anesthesiologist that has a contract saying he will be paid 50th percentile of MGMA.
 
ryanjmy said:
I don’t think its legally required but I think your trying to say its required by legal, meaning the hospital lawyers have to assure that you are not being paid above fair market value. I’ve been told by adminastration that they have a policy against paying anyone above the 75 percentile.

I also know an anesthesiologist that has a contract saying he will be paid 50th percentile of MGMA.
Click to expand...

I can’t wrap my head around how a hospital would even want to say they pay average 50th%tile. “Hello community, please come to our average hospital with average doctors”.

Unless of course they want to pay average for above average people.
 
ryanjmy said:
I don’t think its legally required but I think your trying to say its required by legal, meaning the hospital lawyers have to assure that you are not being paid above fair market value. I’ve been told by adminastration that they have a policy against paying anyone above the 75 percentile.

I also know an anesthesiologist that has a contract saying he will be paid 50th percentile of MGMA.
Click to expand...

I think you are right on what I’m reading. It’s more about making sure hospitals don’t pay too much and make it look like something shady is going on and get investigated and get in trouble.
 
When you are working for a private employer there is nothing "legally required" to determine your pay.
On the other hand if you work for a company that actually understands and appreciates the employment market, they will periodically perform a reevaluation of your salary to determine if they are doing a good job on staying competitive and retaining employees.
 
anes121508 said:
I think you are right on what I’m reading. It’s more about making sure hospitals don’t pay too much and make it look like something shady is going on and get investigated and get in trouble.
Click to expand...


This is not really an issue for hospital employed anesthesiologists. However, for other referring specialists, excessive compensation can be construed as an illegal incentive to refer patients.
 
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ryanjmy said:
I don’t think its legally required but I think your trying to say its required by legal, meaning the hospital lawyers have to assure that you are not being paid above fair market value. I’ve been told by adminastration that they have a policy against paying anyone above the 75 percentile.

I also know an anesthesiologist that has a contract saying he will be paid 50th percentile of MGMA.
Click to expand...

How would this work if you have a contract to be paid 50th percentile of MGMA?
From what I read in the MGMA data, it’s percentiles based on years in practice.. so let’s say 5yrs in practice 50th percentile is 420k and goes up a little every year. Does this person then renegotiate the contract every couple years?
 
nimbus said:
This is not really an issue for hospital employed anesthesiologists. However, for other referring specialists, excessive compensation can be construed as an illegal incentive to refer patients.
Click to expand...

I think that from what I’ve read you are right.
 
fittipaldi1of1 said:
How would this work if you have a contract to be paid 50th percentile of MGMA?
From what I read in the MGMA data, it’s percentiles based on years in practice.. so let’s say 5yrs in practice 50th percentile is 420k and goes up a little every year. Does this person then renegotiate the contract every couple years?
Click to expand...

That’s exactly my thought. Needs to be more detailed. Too easy to take numbers and twist them to your advantage.
 
fittipaldi1of1 said:
How would this work if you have a contract to be paid 50th percentile of MGMA?
From what I read in the MGMA data, it’s percentiles based on years in practice.. so let’s say 5yrs in practice 50th percentile is 420k and goes up a little every year. Does this person then renegotiate the contract every couple years?
Click to expand...

The data is sortable by a lot of factors, years in practice, region, w2 vs 1099 or you can have no filters and get numbers from every practice.

His contract may have said paid at least 50th percentile, but it was really close to exactly the 50th percentile.
 
dr doze said:
Somebody has to be above the 75th or 95th percentile (whatever numbers they are)
"FAIR" depends on whose writing the check and whose cashing the check.
Click to expand...

Yeah but the OP was for hospital employees. I doubt there are hospital employees making 95th percentile.
 
"Fair market value" payment is likely required by the hospital's financers, other creditors or possibly its articles of incorporation. Your hospital might do any of a number of things to determine it, ie) hire consultants, compare to survey data, etc. Obviously they can choose the consultants or interpret the data however they want to pay you less. I suspect most employers compare based off hours or units, as opposed to bottom-line reimbursement. So depending on your payer base it could be better or worse. Make sure you figure out how they get their numbers and what adjustments they make or should make to the inputs (ie, sick patient population, long turnover times, efficient resource utilization, QI measures etc) and hopefully you have anesthesiology representation at the reimbursement meetings.

As always, know that the administrators want to pay you or your replacement the minimum amount possible to get the cases staffed and billed.
 
If you are paid the MGMA median that's not bad pay... But what the hospital will probably try to do is pay the MGMA median, and try to work you harder & longer than median hours while telling you its fair.
 
Guillemot said:
If you are paid the MGMA median that's not bad pay... But what the hospital will probably try to do is pay the MGMA median, and try to work you harder & longer than median hours while telling you its fair.
Click to expand...

Is this type of info included in MGMA? Hours worked, call freq, supervision ratio, etc?
 
I’ll just add this tidbit. As an employed physician for the past 15 yrs, I have a contract that pays me 50% of MGMA and the other physician salary sources which I believe are a little higher. But what these sources don’t do well is define the number of days worked or units or whatever your administration wants to use. This is where the value is.
For example 50% salary with well north of 12 weeks vacation. Benies are added on top of all of this.
 
Ill give an example, when you are negotiating with your admin ask how many shifts the ER docs and the Hospitalists are doing. They are probably the closest to us in comparison, ie: shift work. Then offer to go beyond their numbers if that makes sense. This way you look good in the eyes of admin because you are willing to work more. They don’t connect the dots well, you also make a lot more than those two groups. About $100-150k more for just 5-10 shift more.
 
ryanjmy said:
Yeah but the OP was for hospital employees. I doubt there are hospital employees making 95th percentile.
Click to expand...

Funny you say that because they want to compete with the large pp group across town that is 95th percentile and has he contract for their largest competitor
 
sbhfl said:
"Fair market value" payment is likely required by the hospital's financers, other creditors or possibly its articles of incorporation. Your hospital might do any of a number of things to determine it, ie) hire consultants, compare to survey data, etc. Obviously they can choose the consultants or interpret the data however they want to pay you less. I suspect most employers compare based off hours or units, as opposed to bottom-line reimbursement. So depending on your payer base it could be better or worse. Make sure you figure out how they get their numbers and what adjustments they make or should make to the inputs (ie, sick patient population, long turnover times, efficient resource utilization, QI measures etc) and hopefully you have anesthesiology representation at the reimbursement meetings.

As always, know that the administrators want to pay you or your replacement the minimum amount possible to get the cases staffed and billed.
Click to expand...

Precisely why I figured I’d ask. Seems like BS to me. Hospital makes the rules of the game, doesn’t specify rules of the game in the contract, then cherry picks consultant with lowest price, and probably cherry picks market timing.
 
Guillemot said:
If you are paid the MGMA median that's not bad pay... But what the hospital will probably try to do is pay the MGMA median, and try to work you harder & longer than median hours while telling you its fair.
Click to expand...

I can’t remember seeing hours and responsibilities in MGMA data.

I remember location, pp vs employed , years of experience

I do not remember call duties (trauma , OB, ect), call frequency, weeks of vacation, hours / week, fellowship trained

Anyone know all the variables you can sort for on mgma?
 
Noyac said:
I’ll just add this tidbit. As an employed physician for the past 15 yrs, I have a contract that pays me 50% of MGMA and the other physician salary sources which I believe are a little higher. But what these sources don’t do well is define the number of days worked or units or whatever your administration wants to use. This is where the value is.
For example 50% salary with well north of 12 weeks vacation. Benies are added on top of all of this.
Click to expand...

Ok so this is great insight that I’m looking for.

Noy, you are saying that mgma data concerning employed physicians does not include benefits correct? Because you said bennies are added on top of all this? Or is this one way you are taking advantage of the admin?

You are also saying that what you need to do is make sure that your work hours are about 10th percentile and your comp is 50th percentile. Then it’s a big win right? So take advantage of what the mgma data doesn’t do?

Has your hospital ever tried to change you to fair market value? And use a consultant? Looking on websites seems they use tons of random variables, but I bet they can just make the numbers say whatever they want.
 
anes121508 said:
Ok so this is great insight that I’m looking for.

Noy, you are saying that mgma data concerning employed physicians does not include benefits correct? Because you said bennies are added on top of all this? Or is this one way you are taking advantage of the admin?

You are also saying that what you need to do is make sure that your work hours are about 10th percentile and your comp is 50th percentile. Then it’s a big win right? So take advantage of what the mgma data doesn’t do?

Has your hospital ever tried to change you to fair market value? And use a consultant? Looking on websites seems they use tons of random variables, but I bet they can just make the numbers say whatever they want.
Click to expand...
Those are extremely loaded questions and good ones.
I’ll try to answer them but it’s a difficult discussion.
I am pretty sure benefits are not included in MGMA data (someone correct me if I’m wrong) and ours were in addition to the salary (after the fact if you will).

Basically, you need to figure out the income/shift or income/hour etc. For example, $400,000/ yr divided by 52 was is $7,700\wk. iIf you take 6 was off then you are at $8,700/wk. If you take 12wks off then you are at $10,000.
You can also break it down by hrs/week. However you want to do it.

Fair market valve: Every location is unique. You just first define (with admin) the needs of the hospital, the anesthesiologists, the surgeons, Etc. Fair Market Value is only fair if it works for your market.
 
MGMA total compensation excludes employer paid benefits. It says so right on its own guide on how to fill out its surveys.
Even though it says it includes 401k, it means that the amount you as the employee contributes voluntarily is included (along with any other pretax benefits you pay for).
So if you are paid 350k and you put in 17k to your 401k and you pay 3k of health + dental insurance premiums and your W-2 box 5 says 330k, MGMA is going to use 350k as your total compensation.
Total compensation does not include malpractice that's paid by the employer, the amount of health insurance premium the employer picks up, and any retirement match paid for by the employer. MGMA total compensation is just the top number on your pay stub.
260509

 
No benefits should be included in MGMA number.
This is such a stupid way to negotiate fair market comp, yet so many hospitals use it.
I have no idea why anyone would respond unfavorably to this survey given that so many places use it for comp. I personally have never received this survey, so who knows who is really giving these figures.
 
mmag said:
MGMA total compensation excludes employer paid benefits. It says so right on its own guide on how to fill out its surveys.
Even though it says it includes 401k, it means that the amount you as the employee contributes voluntarily is included (along with any other pretax benefits you pay for).
So if you are paid 350k and you put in 17k to your 401k and you pay 3k of health + dental insurance premiums and your W-2 box 5 says 330k, MGMA is going to use 350k as your total compensation.
Total compensation does not include malpractice that's paid by the employer, the amount of health insurance premium the employer picks up, and any retirement match paid for by the employer. MGMA total compensation is just the top number on your pay stub.
View attachment 260509
Click to expand...

So if the hospital says great , we will pay you 50th percentile based on mgma and that’s 400....people in mgma are likely getting 420ish , then contributing to their 401k and fsa , then reporting 400.

So that means means you will actually be lower. Get 400 per mgma 50th percentile then contribute to your pretax vehicles and now you are around 380.

Am I right?
 
Noyac said:
Those are extremely loaded questions and good ones.
I’ll try to answer them but it’s a difficult discussion.
I am pretty sure benefits are not included in MGMA data (someone correct me if I’m wrong) and ours were in addition to the salary (after the fact if you will).

Basically, you need to figure out the income/shift or income/hour etc. For example, $400,000/ yr divided by 52 was is $7,700\wk. iIf you take 6 was off then you are at $8,700/wk. If you take 12wks off then you are at $10,000.
You can also break it down by hrs/week. However you want to do it.

Fair market valve: Every location is unique. You just first define (with admin) the needs of the hospital, the anesthesiologists, the surgeons, Etc. Fair Market Value is only fair if it works for your market.
Click to expand...

, I know , kind of meant to be loaded. I see what you are saying though.
 
Eh, on second thought I’m deleting my response here. Happy to discuss more in closed forum but it’s not as simple or easy as some are saying...
 
Last edited:
This thread highlights how administrators, hospitals, amc’s have totally severed our income from the billing we generate.

I’ve been a hospital employee, amc employee, self employed. I’ve been salary, eat what you kill, blended unit etc.

In my experience the most important factors for income are 1. Who is paying you (insurance vs govt)
2. How many layers there are between you and the billing. (Ideally only a billing company, charging 5-8%)
3. How productive you are. Although, this goes out the window with salary. You’re only negotiating ability is before you sign the contract. Once you’ve signed, your only leverage is your ability to quit, and that’s a huge hassle.

These mgma numbers are based on what? Surveys that no one I know answers? So now the hospitals are basing salaries on surveys and keeping all the billing while while they work people as much as possible. No thank you.
 
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bigeyedfish said:
This thread highlights how administrators, hospitals, amc’s have totally severed our income from the billing we generate.

I’ve been a hospital employee, amc employee, self employed. I’ve been salary, eat what you kill, blended unit etc.

In my experience the most important factors for income are 1. Who is paying you (insurance vs govt)
2. How many layers there are between you and the billing. (Ideally only a billing company, charging 5-8%)
3. How productive you are. Although, this goes out the window with salary. You’re only negotiating ability is before you sign the contract. Once you’ve signed, your only leverage is your ability to quit, and that’s a huge hassle.

These mgma numbers are based on what? Surveys that no one I know answers? So now the hospitals are basing salaries on surveys and keeping all the billing while while they work people as much as possible. No thank you.
Click to expand...

The points you bring up about leverage and surveys that aren’t truly representative of the field are very much what runs through my mind when I think about this entire concept
 
bigeyedfish said:
This thread highlights how administrators, hospitals, amc’s have totally severed our income from the billing we generate.
Click to expand...

It cuts both ways. If your blended unit is in the $20s you are going to be happy to not have your salary tied to your billing.
 
anes121508 said:
Ok so this is great insight that I’m looking for.

Noy, you are saying that mgma data concerning employed physicians does not include benefits correct? Because you said bennies are added on top of all this? Or is this one way you are taking advantage of the admin?

You are also saying that what you need to do is make sure that your work hours are about 10th percentile and your comp is 50th percentile. Then it’s a big win right? So take advantage of what the mgma data doesn’t do?

Has your hospital ever tried to change you to fair market value? And use a consultant? Looking on websites seems they use tons of random variables, but I bet they can just make the numbers say whatever they want.
Click to expand...

I would think the point is that you don’t let them pay you 20th percentile and play it off as 50th percentile by wrongly including benefits.
The other point is hours. Get overtime included in the contract somehow so if they want to work you more than the 50th percentile they’re paying for, they’ll have to pay for it. It takes away the ability and the incentive to abuse you.

Edit: I guess I’m defining ‘abuse’ as working you really long hours for no additional pay while I’d call working you really long hours for lots of extra pay just ‘working you hard’. If working really hard even with extra pay isn’t appealing, you might prefer to negotiate a cap on hours rather than just an overtime schedule if that’s possible.
 
Last edited by a moderator:
anes121508 said:
So if the hospital says great , we will pay you 50th percentile based on mgma and that’s 400....people in mgma are likely getting 420ish , then contributing to their 401k and fsa , then reporting 400.

So that means means you will actually be lower. Get 400 per mgma 50th percentile then contribute to your pretax vehicles and now you are around 380.

Am I right?
Click to expand...
Yup.... It all depends on how generous the benefits are. If hospital A pays you 400k but pays for your entire health insurance premium and gives you a 20k 401k match, your MGMA total compensation is 400k. Hospital B can also pay you 400k but make you pay for almost all of your health insurance premium and no 401k match, your MGMA total compensation is still 400k.
 
MGMA is all self selected. Your practice volunteers up the data in exchange for getting the entire data report. If I was a hospital and I paid awful wages, I'd ask all my buddies who pay like crap to participate in the survey with me so our numbers will become closer to 50% percentile and thus market rate.

www.asahq.org

The 2018 MGMA Compensation and Production Survey is Now Open!

www.asahq.org www.asahq.org

bigeyedfish said:
This thread highlights how administrators, hospitals, amc’s have totally severed our income from the billing we generate.

I’ve been a hospital employee, amc employee, self employed. I’ve been salary, eat what you kill, blended unit etc.

In my experience the most important factors for income are 1. Who is paying you (insurance vs govt)
2. How many layers there are between you and the billing. (Ideally only a billing company, charging 5-8%)
3. How productive you are. Although, this goes out the window with salary. You’re only negotiating ability is before you sign the contract. Once you’ve signed, your only leverage is your ability to quit, and that’s a huge hassle.

These mgma numbers are based on what? Surveys that no one I know answers? So now the hospitals are basing salaries on surveys and keeping all the billing while while they work people as much as possible. No thank you.
Click to expand...
 
ryanjmy said:
It cuts both ways. If your blended unit is in the $20s you are going to be happy to not have your salary tied to your billing.
Click to expand...

I’m fully aware of this. It cuts deeper when someone else is taking all the collections your generating. And in many cases, not even allowing access to know how much your billing.
 
mmag said:
MGMA is all self selected. Your practice volunteers up the data in exchange for getting the entire data report. If I was a hospital and I paid awful wages, I'd ask all my buddies who pay like crap to participate in the survey with me so our numbers will become closer to 50% percentile and thus market rate.

www.asahq.org

The 2018 MGMA Compensation and Production Survey is Now Open!

www.asahq.org www.asahq.org
Click to expand...

Sounds like it self selects for lower pay.
 
anes121508 said:
Precisely.

So why enter a rigged game?
Click to expand...
The game itself is not necessarily rigged. The opposite also applies too. If a bunch of people reported high compensation then their compensation percentile will drop and go closer to 50%th percentile. However I'm betting that most of those people are in PP where salary is not based on MGMA so they don't care to share. Also if physician salaries go up, there's more pressure towards CRNAs from the bean counters.
To win in this game for everyone, you'd need over reporting of high anesthesiologist and CRNA salaries. Alternatively, you can cut back on the hours worked and have that be reflected in a lower salary making things quite competitive with CRNAs.
 
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